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ESR News Blog

ESR Newsletter and Legal Update

This newsletter is sent to clients of Employment Screening Resources (ESR), as well as employers, Human Resources and Security professionals, and law firms who require information on pre-employment screening, safe hiring, the FCRA and legal compliance. If this was sent in error, you can be removed from this mailing by using the â€œremove” feature at the end of the newsletter.

Two events occurred recently that may show an increasing national trend: ex-offenders who are denied employment based upon their past criminal records seeking legal redress through discrimination lawsuits.

A continuing education event held this month in a large eastern state included discussions on how to sue employers and background firms for discrimination on behalf of job applicants denied employment due to a criminal record for discrimination. The discussion reportedly included legal aid lawyers who assist low-income persons in attempting to obtain employment, government lawyers and private lawyers who could take cases to sue employers and background firms.

A second event was a case handed down last month in Hawaii. A large national retailer discharged an employee who was being promoted to management and a criminal background check revealed a previous conviction for drug use. Apparently, there was no background check when he was first hired, and he did pass a drug test. A lower court dismissed the case but the Hawaii Supreme Court ruled that the consumer was allowed to proceed with his lawsuit since Hawaii law specifies that an employer may utilize a criminal record for hiring and termination provided â€œthe criminal record bears a rational relationship to the duties and responsibilities of the position.â€ See: HRS Sec. 378-2.5(a).

These two events that took place thousands of miles apart taken together underscore that employers need to carefully examine the proper use and utilization of criminal records in the hiring process. Employers are caught in a classic Catch-22. Employers have a legal duty to make reasonable inquiries about who they hire, and to provide a safe workplace. Hiring a person with an unsuitable criminal record in the light of the work to be performed can expose an employer to lawsuits for negligent hiring, as well as place employees and the public at unnecessary risk. Newspapers are full almost every day of stories about workplace violence, children being harmed and lawsuits filed where businesses hired people who were dangerous, unqualified or unfit.

On the other hand, an automatic rejection of any applicant with a criminal record makes it very difficult for an ex-offender to get back into the workforce. Given that, on the average, it costs over $30,000 a year to incarcerate a prisoner in the United States, and that without a job it is very difficult for an ex-offender to become a law abiding tax paying citizen, it is critical that society gives everyone an opportunity to work. The EEOC also has made it clear that a criminal record cannot be grounds to automatically deny employment without business justification. (For a discussion on the laws concerning the proper use of criminal records, see chapter 11, â€œThe Safe Hiring Manual,â€ by Lester S. Rosen, President of ESR (Facts on Demand Press/512 pages).

The bottom-line: As a society, we do not want to risk the lives and property of people by bad hiring decisions. On the other hand, we do not want to create a permanent class of unemployable ex-offenders who can never re-enter society and be productive. The key is to understand that there is a job for everyone, although not everyone is qualified for every job. Employers should not overreact or react automatically because an otherwise qualified applicant has had difficulty in the past unless there is a business justification to reject the applicant. It is also important for our society to help with the re-entry of ex-offenders by supporting programs and opportunities. For example, the National Association of Professional Background Screeners (www.NAPBS.com) has donated money to programs aimed at helping ex-offenders get back into the workforce.

2. Dispelling Urban Myths: Credit Scores Not Used for Employment

One of the biggest misconceptions in employment screening is that a personâ€™s credit score is being utilized for employment. Recently a story in a major newspaper quoted experts on why credit sores should not be used for employment.

The problem: Credit sores are NOT used for employment purposes. When an employer does utilize a credit report for employment purposes, it is a special form of employment credit report that specifically EXCLUDES the credit score. The reason is simple – there is no rational relationship between a credit score and suitability for employment.

Typically, employers utilize credit reports for three reasons:

To determine if the salary to debt ratio is appropriate. The idea is that if an applicantâ€™s salary does not cover their current debt, there is a potential security issue;

To determine if a person can handle their own financial affairs if they are going to be trusted with handling the employers money or assets;

In the case of a sales position, to determine if a salesperson has the ability to rent cars, purchase airfare and other travel expenses needed to cover their territory.

However, the use of credit reports for employment can be sensitive since it shows among other things where and how a person spends money. Since it is difficult to â€œscoreâ€ a credit report for employment purposes, the use of a credit report is often a judgment call.

Employers should approach the use of credit reports with caution for some of the following reason:

The information on the credit report can be erroneous since it is gathered from numerous sources.

Information may not be employment related. For example, if there are debts due to medical bills, that is not likely to affect a personâ€™s suitability for a job.

Employers should be very cautious using a bankruptcy for an employment decision.
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ESR is asking its clients and readers to share their nomination for the Biggest Mistake employers make when they hire.

Every time an employer makes a hire, the stakes are high. Employees are not only a firmâ€™s biggest source of expenditures and investment, but also a big source of risk. If an employer makes a bad hiring decision, a number of authorities suggest that the cost to an organization can be up to 2 to 3 times the personâ€™s salary, taking into account not only the cost or replacing the person, but the cost associated with the work not being done correctly and the delays in finding and training the right applicant.

There are numerous books, courses, websites and seminars on hiring. Here is our first suggestion for the single biggest mistake a firm can make when hiring (based on seminars given by internationally known consultant Brian Tracy at http://www.briantracy.com):

Comparing candidates to each other instead of comparing them to the ideal candidate.

Many hiring managers make the mistake of settling for the best of the current group of applicants rather than waiting for the right one for the job. The primary reason is the need to hire quick to fill a position. However, if the employee â€œdoes not work out,â€ then the termination process can be painfully slow and expensive. Employers are so gun-shy of termination that many employers make it a slow process to make sure they have given the unsuccessful worker an opportunity to find a position where they can do no harm and failing that, they begin the long process of documenting the termination.

Instead of the common American practice of hiring quick and terminating slowly, managers should do the oppositeâ€”hire slowly but terminate quickly. Obviously, a slow hiring process where the employers hold out for who they are really looking for will lessen the need to worry about termination.

If you have a great piece of advice on how to hire to share, please e-mail your suggestions to Jared Callahan at jcallahan@ESRcheck.com for inclusion in a future ESR newsletter.

4. ESR Speaking Schedule â€“ From New York to San Diego

ESR announces that the Safe Hiring Certification Training is now available in four separate mini-courses, in addition to the intensive 30 Hour course. The smaller course allows participants to focus in on just those areas of immediate interest and need. This is the first and only online educational and professional development course designed for employers, human resources and security professionals, and anyone responsible for risk management and due diligence in hiring.

The Safe Hiring Certification Training is a self-paced, on-line course that can be accessed at any time from anywhere, including at work.

Features of this course include:

Convenient 24/7/365 availability through any online connection

21 self-paced lessons on Safe Hiring practices

A printable, 190-page workbook to facilitate note-taking and preparation for review quizzes

Review quizzes after each lesson featuring more than 300 questions about safe hiring

Easy access to useful Safe Hiring web-links

Sample safe hiring forms to help guide your own form development

Industry certification in Safe Hiring

Additional audio pointers by author Les Rosen (requires speakers but not a requirement for course completion

Through this course, participants will obtain the knowledge and skills necessary to implement and manage a legal and effective safe hiring program, including employment screening background checks. Upon successful completion, participants will receive a Certificate of Completion, marking a significant professional accomplishment. The course is offered at no charge to ESR clients.

ESR wrote the book on background checks! â€“ The Safe Hiring Manual, now in its third printing, is available from BRB Publications. Click here to read more. The definitive book on pre-employment screening, â€œThe Safe Hiring Manual-The Complete Guide to Keeping Criminals, Terrorists and Imposters out of Your Workplace,â€ has undergone its third printing since its introduction a year ago. The new printing also contains updates and new material.

ESR is pleased to participate in the following seminars across the United States, including three nationwide SHRM Conference: the SHRM National Conference, the SHRM EMA Conference and the Global Screening Conference.

Current 2006 Schedule

September 30, 2006–San Diego, CA “Negligent Hiring Mock Trial– College and University HR in the Hot Seat.” National HR Conference for College and University Professional Association for Human Resources (CUPA-HR)

November 13, 2006 –Tampa, FL – Keynote address at the Annual Pre-Employment Screeners Conference (Intended for background firms and record retrievers) ” The Top Ten Ways for a Screening Firm to Be Sued Out of Existence by Employers and Consumers ” See: http://www.searchforcrime.com/Conference/body.htm

November 20, 2006— IOMA audio conference–“Background Checks: Legal Use in the Hiring and Talent Management Process”

December 5, 2006–Sonoma County, CA “Avoid Problem Employees: Effective Hiring in the Wine industry” NCHRA conference (dentils to be posted)